In a landmark decision with far-reaching implications for architects, engineers, and contractors, the Massachusetts Supreme Judicial Court (SJC) ruled that the state’s six-year statute of repose does not bar claims for contractual indemnification tied to defective design services. The ruling underscores how liability for design professionals and contractors may persist longer than many assumed—placing greater importance on the careful negotiation of contractual terms.

The case, Trustees of Boston University v. Clough, Harbour & Associates LLP, centered on a dispute between Boston University (BU) and engineering firm Clough, Harbour & Associates (CHA) over alleged design defects in a multipurpose field and an underground parking structure completed in 2013. Under their nearly $1 million contract, CHA agreed to indemnify BU for "any and all" expenses stemming from negligent design.

According to BU, soon after completion, structural issues emerged. The design had allegedly failed to account for seasonal expansion in the joists supporting the garage, leading to depressions in the field above and rendering it unsafe for use. BU spent $25,000 on repairs and sought reimbursement from CHA under the indemnification clause. When CHA refused, BU filed suit in 2020.

CHA moved to dismiss the lawsuit, citing Massachusetts General Laws chapter 260, section 2B—the statute of repose—which bars negligence claims more than six years after substantial completion or occupancy of an improvement to real property. A Superior Court judge agreed with CHA, granting summary judgment. BU appealed, leading to a pivotal SJC ruling that reversed the lower court’s decision.

The SJC found that because BU’s claim arose from a contractual indemnity provision, it was not a tort claim subject to the statute of repose’s six-year limit. The court wrote:

"[T]o prevail on its claim, the university must show the existence of a valid and enforceable indemnification clause, the occurrence of an event triggering the duty to indemnify, the provision of adequate notice to the indemnitor, and the failure of the indemnitor to fulfill its obligation as specified in the indemnification clause."

The court contrasted this with the elements required for a negligence claim:

"[B]y contrast, a negligence claim requires a plaintiff to show duty, breach, causation, and damages.... Accordingly, the university's claim is contractual in nature, and the tort statute of repose does not bar it."

Relying on Precedent

The SJC’s ruling drew heavily on its 1990 decision in Gomes v. Pan American Associates, where it similarly held that enforcing an express indemnification clause was a contractual action, not a tort claim barred by the statute of repose. In Gomes, an architect was sued by a mall owner under an indemnification clause, even though the underlying negligence claim by an injured patron was time-barred under the statute of repose. The SJC upheld the mall owner’s claim, reasoning:

“[T]he language of the indemnification provision is overwhelmingly contractual.”

A Shift in Risk

While the decision aligns with existing Massachusetts precedent, it raises concerns in the design and construction industries. Some see the ruling as undermining the statute of repose’s purpose—creating a time limit for exposure to claims tied to design and construction work. Critics argue it effectively extends liability indefinitely if indemnification clauses are not carefully drafted.

This outcome could prompt legislative action. Legal experts speculate the Massachusetts Legislature may amend the statute to include contractual indemnification claims arising from negligent acts, ensuring design professionals and contractors are not exposed to perpetual liability.

Key Takeaways for the Industry

The BU ruling serves as a cautionary tale for design professionals and contractors. Firms must pay close attention when drafting indemnity provisions, ensuring they do not unintentionally extend liability beyond the protections of the statute of repose.

Contractors and designers should work closely with legal counsel to evaluate:

• Whether indemnification clauses explicitly limit liability to the statute of repose period
• How indemnification obligations are triggered and defined
• The scope of obligations tied to negligence versus contractual performance

Failure to negotiate these provisions carefully could mean firms remain liable for claims tied to defective design or construction years—even decades—after a project is complete.

The ruling also underscores a broader trend in construction law: courts increasingly enforce negotiated contract terms even when they conflict with statutory protections designed to limit liability.

In light of the decision, Massachusetts construction professionals may need to revisit their standard contracts. Without clear limits, indemnification provisions could subject firms to long-term financial and legal risks that outlast even the most robust statutory protections.

Originally reported by JD Supra.